Blog Categories

Startups step into the smartphone game

March 26, 2010

By Peter Key

In October 2008, 60 people attended Mobile Monday Mid-Atlantic’s first meeting at the Union League of Philadelphia to hear six people, four of whom co-founded the organization, talk about the state of mobile technology in the area.

Earlier this month, the latest meeting of the local chapter of the global mobile-technology group drew 250 people to the Cira Centre to hear a panel moderated by KYW Newsradio Medical Editor Dr. Brian McDonough discuss how mobile technology is being used in health care.

Meanwhile, in Austin, Texas, on the same day, Philadelphia’s latest mobile-technology company, NearVerse Inc., launched its first application at South by Southwest, an international music, film and emerging-technology conference.

Technology that people can use to work, play, or get information through their smart phones and other mobile devices is catching on.

“I was very proud going to that Mobile [Monday] meeting and seeing all those people,” said Brad Blumberg, who was one of the organization’s founders and is the CEO of one of the area’s oldest mobile-app companies, Camden-based Smarter Agent Inc.

Data from technology research firms indicate a growing market for mobile applications.

Yankee Group Research Inc. earlier this month said it expects U.S. consumers to download nearly 1.6 billion mobile apps this year and more than 6 billion annually by 2014.

The Boston firm also said consumers are now paying for one third of the apps they download, up from 18 percent last year. As a result, Yankee Group raised its forecast for mobile-app download revenue in the United States this year to $1.6 billion from $573 million and predicted the figure would top $11 billion in 2014.

Gartner Inc. said in January that 4.5 billion mobile apps will be downloaded worldwide this year, 82 percent of them at no charge to the downloader. The Stamford, Conn.-based research company expects more than 21.6 billion mobile apps will be downloaded in 2013, but it expects the percentage of free apps to increase to 87 percent that year.

Despite the give-aways, Gartner is forecasting consumers across the globe to spend $6.2 billion on mobile apps this year and $29.5 billion in 2013.
Those download and revenue figures have three drivers, said J.P. Finnell, the founder and CEO of Newtown Square-based consulting firm Mobility Partners LLC and a founder of Mobile Monday Mid-Atlantic.

The first is network speeds. For example, T-Mobile just upgraded its 3G wireless network in Philadelphia to enable download speeds of 21 megabits per second.
The second is the computing capability of today’s mobile devices, which Finnell said, on average, have the equivalent processing power of a workstation made by Sun
Microsystems 15 years ago.

The third is the model for making apps available online pioneered by Apple Inc. for the iPhone and emulated by Research in Motion Ltd. for the Blackberry and Google Inc. for Android phones.

“Apple took a lot of friction out of the system, just like they did with iTunes,” Finnell said.

Those factors haven’t made smart phones ubiquitous just yet, but they’re heading in that direction. Seventeen percent of mobile-phone subscribers in the United States owned smart phones at the end of last year, up from 11 percent in December 2008, according to comScore Inc. Overall 3G phone ownership was up to 43 percent from 32 percent, according to the Reston, Va.-based digital marketing intelligence firm.

Those numbers indicate that mobile technology in general, and mobile applications in particular, are less the sole domain of tech geeks than they used to be. That’s also demonstrated by the growth of Mobile Monday Mid-Atlantic, which has grown to 1,400 members since it began in September 2007, and changes in the tone of its meetings.

“Two years ago, you would have seen people talking about the spectrum and the processors for the devices and the location-based chips that will go into the phones,” at a Mobile Monday Mid-Atlantic meeting, Finnell said. “The topics we see now are specific industry-based topics like mobile health and mobile marketing.”

Mobile applications are changing industries because mobile technology is changing how people do things, including how they relate to each other.

Relationships are key to two of the area’s young mobile-app companies, NearVerse and Venmo Inc..

NearVerse has developed an app called LoKast that allows iPhone and iPod touch owners to share contacts, Web links, photos, music and videos with other people with the devices within 300 feet of them.

LoKast, which gets its name because it enables local-casting (as opposed to broadcasting), deals with copyright issues on music in two ways. It only lets people share either snippets of songs available on the iTunes store, forcing someone who likes the snippet to buy any song he wants to hear entirely, or tunes on a server that NearVerse makes available to musicians who want to give out their music.

Boris Bogatin, NearVerse’s CEO and co-founder, said the idea behind LoKast’s technology is to make it as easy for people to share digital information with people through the Internet as it is to share information with people with whom they are physically interacting.

“It’s a digital medium to support your physical interactions,” he said.